Crypto Scandal Archives - Page 2 of 11

Insane !12 Busted in $15M Crypto Laundering Ring : Hong Kong Cracks Down on Web3 Fraud

Twelve people just got clapped by Hong Kong and mainland China cops for laundering HK$118M ($15M) through fake bank accounts + crypto exchanges. Yeah, they were literally running the operation from an apartment in Mong Kok.

These fraudsters used 500+ stooge accounts (that’s when you use someone else’s bank info) to wash dirty money from scams and flip it into it. Two rookies got caught mid-mission trying to drop stacks at a shop in Tsim Sha Tsui—police swooped in and grabbed HK$770K cash on the spot.

The Haul:

$134K in seized cash
560+ ATM cards
Phones & docs tied to bank ops

Most of these stooge accounts came from clueless friends and fam—yikes. This bust comes while fraud cases in HK are up 12% and 73% of them are tied to stooge accounts.

🛡️ HK’s Response:
Hong Kong’s pushing back hard with a new tool called CryptoTrace—made with the University of Hong Kong—to track shady crypto activity. Plus, the city’s still dealing with that fake “National Hong Kong Coin” scam that finessed $3.1B in 2024.

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Tether’s Blacklist Lag Lets Hackers Move $78M in USDT Before Freeze

Hackers Exploit Tether Delay to Snag $78M in USDT

Tether’s wallet blacklisting system just got exposed for having a major weak spot — and hackers were quick to take full advantage.

A new report from blockchain compliance firm AMLBot, released on May 15, reveals that over $78 million in USDT was successfully moved by criminals before Tether could freeze their wallets. The key issue? A lag in it’s two-step blacklist system.

Here’s how it works: Tether first publishes a public “warning” on-chain when a wallet is flagged, but the actual freeze comes later. That delay — sometimes up to 45 minutes — is all attackers need to make a clean escape.

In one case shared by AMLBot, the warning hit at 11:10 UTC, but the wallet wasn’t frozen until 11:54 UTC. That’s nearly an hour for the hacker to move funds — and they did.

Between Ethereum and Tron, $28.5M and $49.6M respectively were funneled out of flagged wallets from 2017 to 2025. Out of 3,480 wallets flagged on Tron, 170 managed to beat the system, each moving close to $292K before the freeze kicked in.

“This isn’t just a tech bug — it’s a playbook for bad actors,” AMLBot warned. Hackers can now monitor Tether’s blacklist signals in real time and act fast.

Tether pushed back on the claims, saying the lag doesn’t mean the system is broken. It highlighted ongoing collaboration with 255+ law enforcement agencies across 55 countries and mentioned that $2.7B in USDT has already been frozen.

Still, they admit there’s room for improvement — and say they’re working to tighten the gap.

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South Korea Busts $540K Crypto Scam Ring; 25 Arrested in Fake Exchange Fraud

ICYMI, South Korea just cracked down on a fake crypto scam investment ring that scammed people out of 734M won (~$540K USD). Police in Jeju nabbed 25 scammers running four sketchy “crypto advisory” call centers that promised sky-high returns.

These fraudsters played pro, acting like crypto team leads and guiding victims to sign up on fake exchanges. Victims were shown fake dashboards with phony profits, making it look like they were winning big. Spoiler alert: they weren’t. These crypto scams really went out of hand.

Once people tried cashing out? Crickets. Funds frozen. Scammers gone.

Of the 25 caught, 20 are now in custody. The rest? Facing charges. But cops think more victims are out there—so this could get even bigger.

Pro tip: If someone slides into your DMs promising fast crypto gains, it’s probs a trap. Always DYOR (Do Your Own Research).

Meanwhile, in a twist, all three South Korean prez candidates are vibing with Bitcoin ETFs and crypto investment. Wild times for Korean crypto.

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Terror ! Crypto Terrorism: U.S. Man Gets 30-Year Sentence for Funding ISIS with Digital Assets

Crypto Terrorism: U.S. Man Gets 30-Year Sentence for Funding ISIS with Digital Assets

In one of the most severe punishments ever handed down for digital finance-related terror funding, 35-year-old Mohammed Azharuddin Chhipa has been sentenced to more than 30 years in federal prison for sending cryptocurrency to ISIS operatives overseas.

The Virginia man was found guilty of funneling over $185,000 to the Islamic State of Iraq and al-Sham (ISIS) from 2019 to 2022, with funds primarily used to aid detained female ISIS members and support frontline fighters.

Chhipa ran a coordinated operation, raising donations via social media, organizing cash pickups, and converting the money into crypto before transferring it to Turkey. From there, it was smuggled into Syria for ISIS activities including prison breaks and funding missions.

Court files revealed that Chhipa worked closely with an active ISIS cell member inside Syria, showing the deep entanglement between digital currencies and modern terror networks.

After a years-long investigation by the FBI Washington Field Office, Chhipa was arrested and convicted in December 2024 on multiple federal charges related to material support of terrorism.

This case has reignited debates on the use of crypto terrorism, calling for tighter regulation and monitoring of cross-border blockchain-based transactions.

Almost every month we get a case of crypto scandal but this might be the first we’ve heard of Crypto Terrorism, Is the impeccable security blockchain provides being used against itself ?

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Breaking ! LockBit Breach Exposes 60K Bitcoin Addresses in Major Dark Web Leak

LockBit Leak Reveals Ransomware’s Crypto Trail

A major blow just landed on one of the most feared ransomware groups online. Hackers broke into LockBit’s dark web affiliate panel and leaked nearly 60,000 Bitcoin addresses used by the group in ransom attacks. It’s one of the biggest leaks ever tied to a cybercrime ring and could change how investigators track these operations.

The leaked database contained 20 detailed tables, including one listing custom ransomware tools made by LockBit affiliates and another with over 4,400 messages between the group and their victims. While no private keys were leaked, the exposure of the addresses gives law enforcement a rare chance to trace payments and map LockBit’s financial footprint.

To top it off, the hackers behind the breach left a taunt: “Don’t do crime. CRIME IS BAD xoxo from Prague.” The same message was used in a separate ransomware gang takedown, suggesting a rogue vigilante group is going after these criminal networks.

LockBit has been under fire for a while. In early 2024, a ten-nation task force moved to dismantle its operations. This leak only ramps up the pressure. And with crypto always in the middle of these schemes, the transparency of blockchain might finally give defenders the upper hand.

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Breaking ! Trader’s $111K Loss in 5 Minutes Highlights the Dangers of FOMO in Crypto

A crypto trader has become the latest cautionary tale in digital asset trading after losing $111,000 in just five minutes due to a rash FOMO-driven decision. The event underscores the harsh consequences of emotional trading in low-liquidity tokens, especially within meme coin circles.

Low Liquidity, High Risk: The Trader $POPE Incident

Blockchain analytics platform Lookonchain revealed that the trader spent 200,000 USDC to purchase POPE, a trending meme coin with low liquidity. Moments after the purchase, the token’s price plummeted, triggering a panic-sell. The trader liquidated their position for just $89,000, taking a staggering 55% loss in under five minutes.

The rapid collapse of POPE’s price reflects the inherent instability of small-cap altcoins, especially those driven by social media hype rather than fundamentals. These tokens are frequently targeted by whales and manipulators due to their ease of movement with relatively little capital.

The fear of missing out (FOMO) remains a leading psychological driver behind such trades. Investors, often influenced by online chatter and viral posts, dive into trending assets without due diligence. When prices inevitably reverse or manipulation kicks in, losses can be swift and devastating.

With the total crypto market cap now at $3.09 trillion, as reported by CoinGecko, opportunities for profit are abundant—but so are the risks. This incident serves as a reminder that speculative markets demand clear strategies and emotional discipline.

As meme coins like POPE continue to generate buzz, traders are urged to stay cautious, avoid impulsive entries, and always assess liquidity before making large trades.

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Crypto Scam in Nigeria, EFCC Declares Foreigner Wanted for Over $800M

The Economic and Financial Crimes Commission (EFCC) has launched a manhunt for Elie Bitar, a 41-year-old foreign national, who is accused of orchestrating one of Nigeria’s largest crypto scams through a platform called Crypto Bridge Exchange (CBEX).

$812M Crypto Scam Through CBEX Promised Fake Returns

According to the EFCC, Bitar allegedly defrauded Nigerians of ₦1.3 trillion (approximately $812 million) by operating CBEX, an unlicensed trading platform that offered unrealistic investment returns. The platform promised to double users’ funds within 30 days, attracting over 600,000 unsuspecting investors.

Though CBEX was registered with Nigeria’s Corporate Affairs Commission and listed with the EFCC’s Special Control Unit Against Money Laundering, it was not licensed by the Securities and Exchange Commission (SEC), making its operations illegal.

The EFCC issued a public notice stating that Bitar’s last known address was Eng. George Enemoh Crescent, Lekki Phase 1, Lagos, and urged anyone with information to contact their offices nationwide. The commission’s spokesperson, Dele Oyewale, reaffirmed their commitment to protecting Nigerians from such scams.

CBEX had previously been flagged by Hong Kong regulators in 2024 for using fake licensing credentials, but Nigerian authorities reportedly took no action at the time.

The platform followed a similar scheme to past scams such as MMM and MBA Forex, using trendy keywords like “crypto” and “AI” to lure in victims. Experts estimate that Nigeria has lost over ₦2 trillion to similar fraudulent ventures over the past decade.

Will Crypto Scam ever come to a halt ?

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Ledger Wallet Scam Hits IRL, $1.6B Lost in Crypto Hacks — Are Your Coins Even Safe in 2025?

Ledger Wallet Owners Targeted IRL as $1.6B Goes Poof in Q1 2025 Crypto Hacks

Yo, 2025 is not playing fair. If you’ve got a Ledger hardware wallet sitting pretty at home, better double-check your mailbox. A new wave of IRL phishing attacks is here, and it’s next-level shady. People are getting physical letters — yep, real paper mail — looking hella official with Ledger logos and all, telling them to “secure their wallets” by scanning a QR code and typing in their 24-word seed phrase. Big nope.

This isn’t just some sketchy email scam — it’s a full-on phishing operation that looks super legit. They’re using return addresses, reference numbers, and “urgent update” lingo to freak users out. But Ledger already clapped back on X (Twitter) saying, “Nah fam, we would never ask for your recovery phrase.” And if they’re asking, it’s a trap.

Why’s this even happening? Some say it links back to Ledger’s massive 2020 data leak where 270K+ users’ info — names, emails, addresses — got doxxed online. And now, those same people are getting hit with long-game scams. This ain’t the first rodeo either — remember those tampered Ledger devices that came with pre-loaded malware?

But wait, it gets worse.

In March, scammers went digital again. Coinbase and Gemini users got phishing emails looking official AF. The scam? A fake class-action lawsuit saying you gotta move your funds to a “self-custody wallet” before April 1, 2025 — or lose access. Spoiler alert: those wallets are 100% controlled by the scammers.

All this comes as Q1 2025 officially becomes the worst quarter for crypto hacks in history. Blockchain security firm Immunefi reports $1.63 billion gone in just 3 months. And 94% of that came from just two insane attacks: Bybit got wrecked for $1.46B, and Phemex took a $69.1M L.

Experts are pointing fingers at North Korea’s Lazarus Group — the usual suspects for high-profile, high-stakes cybercrime. So yeah, crypto might be mooning, but so are the scammers.

The Takeaway?

Never give out your seed phrase — not online, not IRL, not ever.
Ledger, Coinbase, Gemini, none of them will ask for it.
If a message (or letter) gives off even 1% scam vibes, don’t bite.
Triple-check sources, use 2FA, and don’t be the next headline.

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$92M Stolen in April: DeFi Hacks Surge as 2025 Losses Top $1.7 Billion

Hackers stole a staggering $92 million from decentralized finance (DeFi) platforms in April 2025, according to a report by blockchain security firm Immunefi. The wave of attacks hit 15 separate DeFi protocols, representing a massive 124% spike compared to March’s $41 million in losses.

The Biggest DeFi Hacks of April

UPCX suffered the most significant breach, losing $70 million in a single exploit.
KiloEx was hit for $7.5 million, though the attacker later returned the funds.
Centralized exchanges were not affected, highlighting DeFi’s unique security challenges.

Immunefi confirmed that all losses in April were limited to DeFi platforms, underlining how vulnerable open-source and permissionless systems remain.

Immunefi’s Warning to the Industry

Immunefi’s CEO, Mitchell Amador, said the growing sophistication of hackers — particularly state-sponsored actors — is one of the crypto industry’s biggest threats.

“The sheer scale of the attack shows how state-backed actors are arguably the most pressing threat to our industry,” Amador warned.

He stressed the need for a “zero-trust” mindset, urging protocols to assume attackers will breach their systems eventually, and to design accordingly.

2025: The Worst Year Yet?

As of April 30, total stolen funds in 2025 have now surpassed $1.7 billion, outpacing all of 2024, which saw $1.49 billion in theft.

Despite better bug bounty programs and increased auditing efforts, cyberattacks on DeFi protocols are accelerating. The industry’s worst breach this year remains the $1.5 billion Bybit hack in February.

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New York Man Jailed for $12M Crypto Scam, Faces 18 Years Behind Bars

Crypto Scam: Eugene William Austin Jr., better known as “Hugh Austin,” has been sentenced to 18 years in federal prison for orchestrating a multi-million dollar crypto fraud scheme that scammed more than two dozen victims out of $12 million.

New York Man Misled Investors with Fake Deals leading a Crypto Scam

The Justice Department also confirmed that his son, Brandon Austin, received a four-year prison sentence earlier in connection to the same crypto scam.

According to U.S. Attorney Jay Clayton, Austin deceived entrepreneurs and investors with fake promises of profitable cryptocurrency investments, short-term trading deals, and bogus brokerage services. He also falsely claimed access to funding from wealthy investors that never existed.

Instead of investing the victims’ money, Austin used the funds for personal indulgences, including luxury hotels, flights, restaurants, and other high-end expenses.

A federal jury convicted Austin in September 2024 on multiple charges including conspiracy to commit wire fraud, money laundering, and transporting stolen property across state lines. The sentencing was carried out by U.S. District Judge P. Kevin Castel.

Austin, 62, of Port Jefferson, New York, will also serve three years of supervised release, forfeit over $6 million in assets, and pay $12.6 million in restitution to the victims.

“This Office will continue to pursue those who exploit trust and use cryptocurrency as a cover for fraud,” said Clayton, praising the efforts of Homeland Security Investigations and the Complex Frauds and Cybercrime Unit.

The case was prosecuted by Assistant U.S. Attorneys Olga Zverovich, Matthew Weinberg, and Andrew Chan.

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